SnapJune 01 2017Updated 3 months ago

What we’re expecting from the US jobs report

We’re expecting sub-consensus wage & jobs growth, but it won’t stop the Fed from hiking in June

Jobs growth

We think April’s 211k jobs growth was little more than a solid rebound after a weather-depressed reading in March. We’d expect payrolls to dip closer to the underlying trend, as weaker economic growth in the first quarter combines with a gradual slowdown in jobs growth as the economy flirts with full employment.

155k

Change in Non-farm Payrolls (NFP)

Consensus: 190k

Wage growth

May had three more workdays than April, and as the data doesn’t adjust for this, we could see a weak wage growth reading. But don’t forget, the tight labour market should continue to translate into higher pay. However, the Fed really needs to see 3%+ wage growth before taking the pace of hikes up a notch.

2.5%

Avg. Hourly Earnings Growth (YoY%)

Consensus: 2.7%

Unemployment rate

Unemployment has fallen by almost half a million people since December, and that has seen the unemployment rate tumble from 4.8% to 4.4% in three months. Whilst undeniably a positive story, the household measure does tend to jump around and we suspect we could see a partial correction this time.

4.5%

Unemployment rate

Consensus: 4.6%